Macdonald 'sought to help friend with coal bid'

THE former mining minister Ian Macdonald sought to reopen a mining exploration tender to ''assist'' his friend, the mining magnate Travers Duncan, a corruption inquiry has heard.

The Independent Commission Against Corruption has heard that Mr Duncan was one of seven investors in Cascade Coal, which was the successful bidder for the Mount Penny coal exploration licence.

After 12 months, Cascade attempted to sell the licence, for which it had paid $1 million, to a big mining company, White Energy, for $500 million. Several Cascade investors, including Brian Flannery and Mr Duncan, were also directors of White Energy. Mount Penny was the area where the family of the Labor powerbroker Eddie Obeid, and associates, bought three crucial properties before the invitation to tender for an exploration licence was called.

Cascade later paid the Obeids $30 million, and the Obeids are at present demanding that Cascade pay a second $30 million.

Mr Macdonald's former chief of staff, Jamie Gibson, told the inquiry on Monday that before opening the tender process, Mr Macdonald sought information from the department specifically about the Mount Penny area.

Asked if he could think of any reason why Mr Macdonald's interest was in this particular area, Mr Gibson replied: ''No, no, I can't.''

The inquiry has also heard that Tianda Resources was originally slated to be the winning bidder and that the Obeids were working on an agreement with Tianda, which was owned by Mr Macdonald's friend, Alan Fang.

For some reason the Fang deal collapsed and in November 2008, Mr Macdonald persuaded the department to reopen the tender. It was suggested to Mr Gibson that he had told two senior departmental officers that Mr Macdonald wanted to reopen the tender to help Mr Duncan's company. Mr Gibson said he could not recall saying that but he would not deny it.

Later he was shown an email exchange he had with Tony Hewson in December 2008, at the time the department was considering whether to reopen the tender process. Mr Hewson had been Mr Macdonald's chief of staff before leaving to work in the mining industry.

Mr Gibson said he was not aware that at the time Mr Hewson was working for Mr Duncan's company, Felix Resources.

The inquiry has heard that Tianda was another of Mr Hewson's clients at the time. ''It's quite likely that it could be in relation to that process [reopening the tender] but I certainly wouldn't talk to Mr Hewson about anything that he should not have knowledge of,'' Mr Gibson said on Monday.

Mr Gibson also said that when Mr Macdonald and the upper house MP, Mr Obeid, met no staff members were allowed to be present. ''Mr Obeid and Mr Macdonald dealt with each other exclusively'', he said. The inquiry continues on Tuesday.